Better Place Goes Down Under to Electrify Australia

Better Placeannounced this afternoon that it is heading Down Under to deploy its electric car infrastructure in Australia. The Palo Alto, Calif.-based startup is working with Australian utility AGL Energy to build an electric car charging grid powered by renewable energy. Macquarie Capital Group will finance the AUD$1 billion ($671 million) undertaking. Starting in the heavily populated areas around Melbourne and Sydney, Better Place plans to have the infrastructure up and running by 2012, when its automotive partner Renault-Nissan will start selling electric cars all over the world.

So why has Better Place decided to set up shop in one of the world’s Top 20 most polluting nations? Better Place knows that size matters, and while critics say the model can only work in diminutive markets like Israel and Denmark, the company needs to show it can scale. If founder Shai Agassi can make it work in Australia, the world’s largest transportation island, he should be be able to make it work anywhere.

Update:During the press call announcing the deal, Agassi blamed the world’s “appetite for oil” for the global economic crisis. The entrepreneur wasted no time comparing the east coast of Australia, where Better Place will build “electric highways” connecting Melbourne, Sydney and Brisbane, to the West Coast of the U.S. where Agassi would like to do the same between L.A., San Francisco and Seattle. The greater Melbourne-Sydney metro area will require 200,000 to 250,000 charging stations, Agassi said. Better Place plans on deploying some 500,000 charging points for the whole of Israel.

Better Place’s Australian debut follows a year-long shift in Australian politics toward a greener government. Prime Minister Kevin Rudd signed the Kyoto Protocol his first day on the job and has made energy and climate change top priorities. Rudd wants to set up a carbon trading scheme by 2010 and has set the target of generating 20 percent of the country’s power from renewables by 2020.

It won’t be easy. Australia is the world’s third-largest producer of coal and generates 80 percent of its power from the sooty stuff, according to the World Coal Institute. But the country also has vast wind, solar and geothermal resources. The government recently invested AUD$50 million to tap more geothermal power and estimates that the country could produce 22,000 megawatts of solar power by 2020. AGL says it will accelerate its renewable energy plans, specifically wind energy, which can work very well with a fleet of charging EVs at night.

The government is also working to clean up its auto industry and created the Green Car Innovation Fund, which will make AUD$500 million available for automakers to build greener cars. Car ownership rates in Australia have been climbing steadily and Better Place estimates the country — which boasts a population of 21 million — bought 1 million cars just last year.

Agassi said in a statement that all these factors create “a compelling case for automobile manufacturers to jump in and build clean, safe, affordable electric cars for Australasia and Southeast Asia.” Already Better Place is using its newest partnership to encourage more countries to go electric. There are plenty of smaller transportation islands through Southeast Asia that could prove fertile for Better Place’s model.

This is the first big announcement from the year-old startup since March, when it said it would be working in Denmark. Renault-Nissan and Better Place seem to be approaching the country-by-country electrification of vehicles like a formal dance. “Sometimes we lead and sometimes Renault-Nissan leads,” Better Place told us today. “In this today case, we’re taking the lead.”